Big bets, bad ends

Between 2003 and 2007 Aliso Viejo-based Point Center Financial Inc. raised close to a half-billion dollarsfor dozens of real estate projects nationwide. Several of those projects failed, triggering a lawsuit against founderDan Harkey and his wife, Assemblywoman Diane Harkey, that will go to trial this week. Here are some examples.

Mi Arbolito LLC

Project: Build a 14-story luxury condominium near Balboa Park in San Diego. Point Center loaned $13.3 million. The developer went bankrupt. Point Center attempted to foreclose, but other lienholders won out.National Financial Lending, a Point Center affiliate, told investors in a letter last month that the investment likely will be a total loss. Mi Arbolito’s current owners are now selling units.

Phoenix Development Group

Project: Redevelop a 19th century mill in Norwich, Conn., into a hotel. The developers went bankrupt. Point Center, which was owed $12.87 million, foreclosed in 2010. The hotel and two related properties were sold at auction last April for $286,990, according to the Norwich city assessor.

The Preserve LLC

Project: Develop the 1,300-acre Legacy Highlands neighborhood in Beaumont, Riverside County. Developer alleged that Point Center provided only $30 million of a promised $39 million loan, causing it to default. A bankruptcy and years of litigation ensued. The developer and Point Center are still locked in a lawsuit.

Summerwind Investors LLC

Project: Build 110 townhomes on a coastal bluff in Carpinteria, Santa Barbara County. Point Center loaned$10 million. Investors allege that the project never won approval from the city or the Coastal Commission. The project went bankrupt, and a senior creditor foreclosed, according to court records, wiping out Point Center investors.

U.S. Land & Cattle Co.

Project: Build 402 single-family homes, an 18-hole golf course and clubhouse, sewer and water system on 391 acres in Los Banos, Merced County. Point Center made a $41.5 million loan, which went into default, according to the investors’ lawsuit.

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